Comex Gold Futures (GC) Technical Analysis – October 29, 2014 Forecast

December Comex Gold futures sold off early in the session, but posted a slight recovery into the close. The rally was triggered by short-covering and position squaring ahead of today’s U.S. Federal Reserve Monetary Policy statement.

The Federal Open Market Committee meeting is expected to announce the end to its quantitative easing program and leave interest rates unchanged. It’s not what the Fed is going to do that is important today, but what it says in the statement. Topics that may be mentioned include the effects of the weak Euro Zone economy on the U.S. recovery, the impact of the strong U.S. Dollar on the economy and falling energy prices as they pertain to inflation.

Gold will react to everything the Fed says about the U.S. Dollar. If the Fed tries to talk down the dollar then look for gold to find support. If the Fed expresses no concerns about the strength of the dollar then look for gold to feel pressure.

The main range is $1183.30 to $1255.60. The retracement zone formed by this range is $1219.40 to $1211.00. This is the primary downside target.

An angle moving up $2.00 from the $1183.30 bottom passes through this zone at $1217.30, making it a valid downside target. Look for an acceleration to the downside if $1211.00 fails. This could trigger an extended break to $1200.30.

The first resistance angle comes in at $1231.60 today. This is followed by additional angles at $1243.60 and $1252.60.

The tone of the market will be determined by trader reaction to $1219.40. Traders may straddle this level several times before picking a direction. A rally from this price could form a potentially bullish secondary higher bottom. A failure at this price means lower prices to follow.